November 11, 2011

DOJ Challenges Ruling That Restricted FDA Enforcement Authority

The U.S. Justice Department's consumer protection branch will ask a federal appeals court to overturn a judge's ruling in Florida that restricted the enforcement power of food and drug regulators to punish pharmacies that compound animal medication.

The department's legal team filed a notice of appeal Thursday in U.S. District Court for the Middle District of Florida, where a judge in September rejected the government's effort to shut down Franck’s Lab, Inc. over allegations the pharmacy was skirting food and drug laws in manufacturing new animal drugs.

Lawyers who practice in food and drug regulation said they expected the Justice Department to appeal the judge's decision, which criticized the U.S. Food and Drug Administration’s assessment of its authority to regulate pharmacies that engage in compounding. Medicine that is compounded is mixed together from other ingredients for a specific patient or animal.

The case against Franck’s Lab, represented by a King & Spalding team in Washington, marked the first time in more than seventy years the FDA tried to enjoin a state-licensed pharmacist from the practice of bulk-compounding of animal drugs. An injunction against Franck’s could have had a national ripple effect, potentially exposing hundreds of other pharmacies to civil or criminal enforcement.

A lawyer for Franck’s, King & Spalding partner Mark Brown, who practices in the firm’s FDA and life sciences group, declined to comment on the Justice Department’s appeal to the U.S. Court of Appeals for the 11th Circuit. A DOJ spokesman was not immediately reached for comment this morning.

Franck’s made international news in April 2009 when nearly two dozen polo horses died from a drug overdose in Florida. The state pharmacy board imposed a fine and reprimanded Franck’s, but state authorities allowed the pharmacy to continue its compounding practice without restriction.

DOJ lawyers, including the Civil Division’s John Claud, said the death of the horses led the FDA to inspect Franck’s laboratory in Ocala, Fla., three times in 2009. The horses died from a drug overdose, and not from compounded medication. The civil action against Franck’s was filed in April 2010.

At court hearings this year and in court papers, Claud argued the FDA had previously warned the pharmacy that its compounding practice was against the law. The government alleged Franck’s compounding practice was creating new drugs that were not subject to the rigors of the approval process.

At a hearing in August 2010, Claud said the FDA is reasonably enforcing its discretion to bring a civil action against Franck’s. He said the government is not trying to punish the pharmacy. If that were the case, he said, DOJ could have brought a misdemeanor criminal case against the company.

“What we want your help to do is to get Mr. Franck and his company to stop violating the law,” Claud said in court. “We don't want to punish him. And we're not picking on him. Hard-pressed to say that he's being picked on when for five years he has been told by the agency in one manner or another, what you're doing is unlawful and it needs to stop.”

King & Spalding partner Ashley Parrish said at the August hearing that the government has long known about the pharmacy’s compounding practice and that the pharmacy has been fully compliant with state and federal regulations. Parrish and Brown said the FDA failed to follow a rule-making process before deciding to target Franck's.

"If you think about separation of powers and federalism principles and why they have these rulemaking requirements, it's precisely for this, so that the agency cannot pick on one person in a way that's inherently arbitrary and capricious," Parrish said in court earlier this year.

U.S. District Judge Timothy Corrigan said at a hearing this year that he has “some confidence that my word will not be the last one, no matter which way it comes out.”

“So I will try to write an opinion that the appellate court can at least understand, if not agree with,” Corrigan said. The judge's decision is here.